Retail businesses have spent the last year navigating fast-changing industry challenges, from reduced consumer spending to rising business costs. In fact, according to Shopify’s 2023 Australian Retail Report, three-quarters (75%) of Australians said they have opted to cut back on spending to save money, while (41%) of business leaders cited operational costs as a key challenge they are facing as a result of the macroeconomic environment, along with the higher cost of wages (45%) and customer growth (32%).
As businesses look for new ways to improve efficiency in their operations and grow their customer base, ensuring your organisation’s commerce software is equipped for today’s fast-paced climate is crucial. Here are four technology takeaways to keep in mind to help your organisation strengthen its commerce foundations.
Stop incurring needless losses
Many organisations cling to outdated commerce platforms, even when they know it’s past time for an upgrade. It’s easy to see why: switching platforms can be a huge, resource-intensive process, with over 60% of enterprises fearing the cost of change according to an IDC survey. But consider the even higher costs of sticking with a suboptimal platform.
To maximise efficiency and decipher whether it’s time to update your team’s tech, it’s vital to first understand your commerce platform’s total cost of ownership (TCO). TCO includes all costs related to a purchase, including price, management, support, end-user expenses, downtime opportunity cost, training, and productivity losses during development. It’s also important to account for recurring costs as they can significantly impact the overall TCO equation.
By unpacking a platform’s TCO, organisations can begin to understand whether their tech stack still fits their needs and budget, or if they are incurring needless losses due to managing outdated tech. With reduced platform costs and less need for development work, forward-thinking enterprises can redirect resources towards serving customers.
Flexibility and speed matter
Fully composable solutions, which were once considered the holy grail for enterprise retail organisations, can come with layers of unnecessary complexity. This is because while designing your tech stack with unique components and modules from different vendors seems flexible in theory, it is often brutal for operational flow. Juggling many disparate, moving parts can be cumbersome and costly to coordinate, requiring a sizable team with the niche expertise to design the architecture needed.
A blended commerce model with a composable front-end and full-stack back-end can provide the speed and customisability necessary to stay ahead of the curve. Used by around 45% of businesses according to IDC research, the blended model allows merchants to maintain simplicity while having the freedom to change or extend parts of the ecommerce experience to meet market trends and customer preferences. Shopify’s new checkout and customer account extensibility features, for example, enable merchants to easily bake in everything from loyalty points to store credits, directly into the shopping journey.
Consider B2B-focused infrastructure
B2B sales represent potentially the biggest commerce opportunity of 2024. Worth an estimated US$7.7 trillion globally, the market opportunity is more than double the size of DTC, and that number is expected to grow by 18% annually until 2030. Australia alone is estimated to reach AU$45.7 billion by 2025.
Yet B2B retail has also been traditionally seen as an industry laggard, with slow digital adoption and manual processes. It’s no surprise why that is: business purchases are inherently more complicated, with various payment terms, purchase orders, wire transfers, volume pricing, and seasonal catalogues.
With a wealth of opportunity on the table, businesses looking to stand out from the crowd in the world of B2B retail need to ensure they have the right infrastructure to support scale. Depending on an organisation’s commerce strategy, this could include sales rep permissions which enable specific employees to be assigned to customers so they can view their information and place orders on their behalf. Headless commerce support can also allow B2B merchants to easily deploy custom digital experiences that include personalised products and dynamic pricing without disrupting back-end processes or website performance.
AI with intention
Artificial intelligence also has an important role to play in the quest to build an agile and efficient retail platform. While businesses once viewed such technologies as a “nice to have”, forward-thinking organisations now increasingly rely on AI to grow their company, maintain global operations and meet customer demand across multiple channels. Shopify’s 2023 Australian Retail Report found that 44% of retail business leaders are investing in AI, or at least planning to increase efficiency and reduce expenses.
When applied with intention, the opportunities to utilise AI to create efficiencies in your retail business are endless. Shopify Magic, for example, is a suite of tools that use generative AI to make product image editing and enhancement easier than ever before, all directly within the Shopify admin. Businesses can also consider utilising AI-powered storefront search. Recently introduced in Shopify’s Winter Edition, AI-powered semantic search allows customers to formulate search queries more intuitively and return rich and relevant search results, reducing friction, and enhancing product discovery and conversion.
Overall, it is imperative for businesses to prioritise optimising their organisation’s commerce technology. By analysing their platform’s TCO, ensuring their infrastructure is hardwired for speed and flexibility, incorporating AI and creating custom shopping experiences tailored for B2B customers, organisations can fortify their commerce foundations to better navigate the demands of today’s fast-paced environment.
![James Johnson](https://www.techedgeai.com/wp-content/uploads/2024/06/James-Johnson-Headshot-150x150.jpg)
Director of Technology Services & Enterprise, APAC at Shopify